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The History of Money

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How did modern money develop? What are the earliest kinds of money? Christy VanArragon and Katy Blake look at money.

Voice 1 

Welcome to Spotlight. I’m Katy Blake.

Voice 2 

And I’m Christy VanArragon. Spotlight uses a special English method of broadcasting. It is easier for people to understand, no matter where in the world they live.

Click here to follow along with this program on YouTube.
Voice 1 

Small, shiny shells. Round metal coins. Colorful paper. Square pieces of plastic. What do these things have in common? They are all different kinds of money!

Voice 2 

How do you get the things you need? Do you trade with a friend? Do you use paper money, or coins? Or do you use credit? Throughout history, people have used all of these different kinds of money. Today’s Spotlight is on the history of money.

Voice 1 

Trading is one of the first ways that people have gotten what they need. For example, in the past, salt was very important to people. People needed salt to keep food fresh. So people would trade salt for other things they needed. People traded salt for shoes, tools, weapons, and food. This method of trading is called bartering. Instead of buying things, people bartered, or traded, for them.

1769 Drawing of A Maori bartering a crayfish with an English naval officer.; British Library, CC0, via Wikimedia Commons
Voice 2 

But bartering does not always work well. For example, a man who makes shoes may need some rice. He may try to trade the shoes he makes for the rice. But the person who grows rice may not need new shoes. If the man who grows rice is not willing to trade, the man who makes shoes is not able to get what he needs.

Voice 1 

So over time, people developed a new system. Instead of bartering, people would trade for particular objects. These objects were often rare or beautiful. But sometimes the objects were even common things.

Voice 2 

These special objects are called proto-money. Proto means “first in time” or “earliest.” So, proto-money is the first, or earliest kind of money. Some cultures used objects such as seeds, pieces of wood, animal skins, cloth, and shells.

Voice 1 

In Native American culture, people used pieces of a special kind of seashell as money. This kind of money was called wampum. People wore the pieces of wampum around their necks. It was a popular form of proto-money. In the 1600s, local governments in the United States even accepted it as an official form of money! People used wampum in America until about the year 1700.

Voice 2 

Another popular kind of proto-money was a shell from the coasts of the Indian Ocean. This shell is called a cowrie shell. People have used cowrie shells in many places – from China to Africa. People used the cowrie shell because it is very beautiful. The shell is white with a little bit of yellow. The surface is very smooth. It is between one and three centimeters long. The small size and the physical beauty made the cowry shell a very popular kind of proto-money. In some parts of the world, people used cowrie shells as money until the 1800s.

Voice 1 

However, the most popular kind of proto-money was metal. The ancient Egyptians weighed amounts of metal like gold or silver. Each amount had a particular value. The Egyptians used gold and silver because of their beauty. These metals were purer than other metals, like iron. People bought things for different amounts of metal. Something very valuable was worth a larger amount and weight of metal. Using metal as money led people to create metal coins.

Voice 2 

People in ancient Turkey made the first metal coins. The coins first appeared almost 3000 years ago. People used special tools to create pictures on pieces of metal. Each picture identified how much the piece of metal weighed. Each different weight of metal was worth a different amount.

Voice 1 

Coins spread from Turkey into Africa and Europe. Soon, coins became the most popular form of money. People began to use coins all over the world. Coins had many different kinds of pictures stamped into them. Some coins had animals, while others showed common things such as tools or plants. Each different picture represented a different amount.

Very old Chinese coin; Scott Semans World Coins (CoinCoin.com), CC BY 3.0, via Wikimedia Commons
Voice 2 

The first person to have his face on a coin was Alexander the Great. Alexander the Great lived more than 2000 years ago. He was the king of an area in Macedonia near Greece. He fought many battles, and never lost. He is one of history’s greatest military commanders. His coins were used throughout his territory.

Voice 1 

Another popular face on a coin was the face of Maria Theresa. She was the queen of Austria in 1765. Her coin was so popular that people used it in countries outside of Austria. People in Arabia and Africa began to use the Maria Theresa coins as money. Some people even believed that the Maria Theresa coins had magical powers. People used these coins in parts of Africa until 1924!

Voice 2 

Even though coins were so popular, it was not easy to carry a lot of coins a far distance. They were too heavy. The Chinese were the first to use paper money instead. They started using paper money more than 1000 years ago. This new paper money was easier to carry for long distances.

Voice 1 

Hundreds of years later, Europe also began to use paper money. In the beginning, people wrote paper money by hand. But as time went on, governments took over the job of making money. If paper money became damaged or too dirty, a person could trade in their old money for new money. If they needed to, they could also trade in the paper for its value in gold or silver.

Voice 2 

Money has continued to change, even in recent times. In some places, people rarely use money. Instead, they use thin plastic credit cards. Using a credit card, a person borrows money from a bank, when he buys something. Then, at the end of the month, he pays the bank. This makes it easy to spend money! Money experts say that it is too easy. When people use paper money or coins, they spend less money. When they use a credit card, people spend more money – even too much money. This leads to debt – the person owes money to the bank.

Voice 1 

What will money look like in the future? Experts think that soon everything will happen electronically – using computers. This digital money will replace physical money. This is already happening. But in most places, people still use beautiful, colorful paper money and shiny metal coins.

Voice 2 

People from long ago may have never imagined all the different and new ways that people can pay for things today. We have come a long way since the days of bartering. What kind of money do you use?

Voice 1 

The writer of this program was Joshua Leo. The producer was Michio Ozaki. The voices you heard were from the United States and the United Kingdom. You can listen to this program again, and read it, on the internet at www.radioenglish.net. This program is called, ‘The History of Money’.

Voice 2 

You can also leave your comments on our website. Or you can email us at radio@radioenglish.net. We hope you can join us again for the next Spotlight program. Goodbye.

Question:

Do you often use cash and coins? What do you think is the future of money?

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12 comments
  • It’s a amazing episode, I learned more information about money how is created or what is common money in the world, for The first time I know this “(People in ancient Turkey made the first metal coins)”
    Thanks the spotlight for helping to learn English and learn new information (:

  • I often use paper and coins money , I think they maybe still use credit card or maybe use digital money but I can’t imagine what is the digital money, anyway thank you for information

  • Earlier, until February 24th, I usually used Apple Pay system on my iPhone, but after that Putin had invaded in Ukraine and Russia had got existential character sanctions its economic, Apple have left from Russia and I’m using paper currency and coins again. I think, if everything will continue the same, perhaps soon we’ll use exchanging like in 17th century

  • In our country we use all kinds of money we use metal coins and colorful paper and credit cards but the world is developing so we have too thanks spotlight for these amazing podcasts we really improving because of you I am daily listen to your podcasts

  • Thanks for article about history of money. I learned more about how money formed. Today, I use paper money and credit cards. I think, the bit coin will replace paper money in the future.

  • Thanks for this Ausom episode , trade ,proto ,coin then paper

    I had a valiable informations like:

    1\Turkey made the first coin on world before 3000 years ago
    2\Alexander The Great has first face on coins in history
    3\Chinese were the first to use paper money in history before 1000 years ago

  • Thanks spotlight for infomation. i usually use paper and coins i never used card even though i think my favorite money is the card at the end in the future the money will change digital

  • Thank you for this interesting and useful episode. In this way I can enhance my information in addition to learn English. Good luck.

  • That a long time for since use way bartering. That a history money amazing. The human invent several ways helped it in pay anything of needed. I often used the card when pay. I don’t know what a human invent in the future. This episode is fun I love the history and I want to study it in university. I keep the learn and improvement English with the spotlight. And I want to give the advice, try less has debt from the bank.

  • I always use paper money its simple and easy. I think in the future it will be develop it will become electronics or digital

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